Trump Media and Rumble Team Up, Moving CF VI (CFVI) & Digital World (DWAC) Prices
Digital World (NASDAQ:DWAC) target Trump Media & Technology Group has announced a cloud services partnership with digital media platform Rumble, which itself has a pending deal with CF VI (NASDAQ:CFVI).
As has been the trend with both deals, little concrete information was released on this new arrangement, but it nonetheless has translated into high-volume buying for both stocks. Digital World is up 2.5% in early morning trading and CF VI is up 5.9%. Even without details, the move would seem to ease at least some of the lingering technology questions about Trump Media, which has been somewhat enigmatic in its explanations of how it will build out the infrastructure for its coming social media and streaming video platforms.
Rumble operates a video content platform with about 36 million users, so it clearly has some infrastructure that works. But, both of these budding ventures place a large share of their raison d’etre as being a haven for voices “censored” or de-platformed off of mainstream outlets. While this is branded as providing a neutral platform, in practice, it has meant creating spaces where conservative commentators and users are the majority, and pressure from advertisers, infrastructure partners and regulators will not influence content.
But, yesterday also saw the first scuffle in what is likely to be an ongoing struggle for both platforms through the de-SPAC process and beyond. Rumble announced it had cut ties with adtech firms Unruly and Tremor International after both objected to placing ads on video content by Rumble’s top content producer Dan Bongino that the firms considered to be pandemic misinformation.
Ultimately both of these platforms will need ad revenue to thrive, and that requires advertisers that want to place ads on their content. Publicly fighting those advertisers about this is good for playing to the tribune, but it doesn’t necessarily put revenue on the table.
What is unique about both of these companies at the moment is that revenue on the table is not what is driving trading behaviors. Investors that either, a.) enjoy buying into these fights or b.) assume others will do exactly that, are eating it up. Given the spotlight put on meme stocks earlier this year, and their subsequent fall, the script for this level of enthusiasm is not one that ends up zooming perpetually moonward.
This is also the sort of dance party that seems destined to provoke noise complaints from the relevant partners and regulators that these platforms will still rely upon appeasing, contrary to their opening thesis.